COSCO SHIPPING Science & Technology 2025 Annual Report Analysis: Net Profit Excluding Non-Recurring Gains and Losses Drops by 84.73%, Operating Cash Flow Surges by 614.56%

Core Profitability Indicators Plunge Deeply

Operating Revenue: Structural Split Behind a Slight Increase

In 2025, the company’s operating revenue was RMB 1.806 billion, up only 0.51% year over year. The revenue scale is basically unchanged. However, the business structure shows a notable split: the revenue from digital shipping and supply chain business was RMB 1.112 billion, up 34.16% year over year, becoming the only driver of revenue growth; while the revenue from digital cities and transportation business was RMB 676 million, down 28.43% year over year, and the shrinkage of traditional business segments is the core reason for weak revenue growth.

Net Profit and Profit After Non-Recurring Gains: A Sharp Drop in Profit Quality

In 2025, the net profit attributable to shareholders of the listed company was RMB 32.5413 million, down 74.50% year over year; profit after non-recurring items was only RMB 18.4692 million, down 84.73% year over year, with a cliff-like decline in profit quality.

Earnings Per Share: Plunging in Step

Basic earnings per share fell from RMB 0.3438 per share in 2024 to RMB 0.0876 per share, down 74.52% year over year; profit after non-recurring items per share fell from RMB 0.3238 per share to RMB 0.0497 per share, down 84.65% year over year, which is broadly consistent with the declines in net profit and profit after non-recurring items.

Expense Control and R&D Expenditure Analysis

Total Expenses: Slight Growth

In 2025, the company’s total operating expenses were RMB 228 million, up 8.5% year over year. Sales expenses, administrative expenses, and R&D expenses all increased to varying degrees. Only finance expenses narrowed year over year due to lower interest income.

Breakdown of Expenses: R&D Spending Keeps Being Stepped Up

• Sales expenses: RMB 30.1603 million, up 13.56% year over year, mainly used for market expansion and business promotion.
• Administrative expenses: RMB 105.0229 million, up 3.54% year over year. Expense growth was relatively stable, reflecting certain effectiveness in cost control.
• Finance expenses: -RMB 25.4316 million, up 10.52% year over year, mainly because interest income decreased in the current period, causing the company’s “negative contribution” in finance expenses to narrow.
• R&D expenses: RMB 111.5144 million, up 10.19% year over year. R&D investment continued to increase; the proportion of R&D expenses to operating revenue rose from 5.63% to 6.17%. Of this, capitalized R&D investment was RMB 5.0623 million, accounting for 4.34% of R&D expenses. It was mainly invested in projects such as the multi-modal intelligent shipping model platform with ship-shore coordination, and the digital twin base capability platform, demonstrating the company’s determination in its technical layout in the digital and intelligent shipping field.

R&D Personnel: Structural Optimization

In 2025, the company had 622 R&D personnel, up 5.07% year over year. Their share of total employees increased from 58.27% to 61.04%. The education structure was further optimized: the number of master’s degree graduate students increased 16.38% year over year, and the number of PhD students increased 33.33% year over year. In terms of age structure, the number of R&D personnel aged 30 to 40 increased 9.39% year over year, and those aged over 40 increased 20.47% year over year. The core R&D team shows a combination of younger and more experienced talent, providing human resources support for technological innovation.

Cash Flows: A Major Divergence Between Operating and Investing

Operating Cash Flow: Significant Improvement

In 2025, net cash flow from operating activities was RMB 80.3308 million, up 614.56% year over year. This was mainly due to an increase in project collections during the current period, with a significant improvement in operating cash collection capability, providing stable cash support for the company’s day-to-day operations.

Investing Cash Flow: Large Outflow

Net cash flow from investing activities was -RMB 994.1148 million, down 47,563.26% year over year. This was mainly because during the current period the company increased its expected holdings of time deposits of more than one year by RMB 1.005 billion. The company allocated a large amount of idle funds to long-term time deposits, resulting in a large net outflow of investing cash flow.

Financing Cash Flow: Basically Stable

Net cash flow from financing activities was -RMB 62.8796 million, up 2.88% year over year, basically stable. There was no inflow from external financing during the current period. The main items were repayment of debts and dividend distribution expenditures.

Key Risk Disclosures

Performance Growth Risk

The digital cities and transportation business—especially the expressway system integration business—has continued to shrink, and expansion into new areas has not yet formed effective support. The platform-based and product-based innovative business within digital shipping and supply chain is still in the cultivation stage; the pace at which new technologies and new products convert into orders has been slower than expected. Some system integration and software development businesses are affected by customers’ budget management and delivery schedules, and their gross margin is relatively low, creating a risk that the company’s main business gross margin will continue to decline.

Innovation and Transformation Risk

Although the company has increased R&D investment in the digital and intelligent shipping field, applications of artificial intelligence and data elements are still at the stage of technical breakthroughs and commercialization exploration. If key technologies fail to break through as expected, or if commercialization applications of products face obstacles, it will lead to a slowdown in the development pace of relevant businesses and affect the company’s overall transformation effectiveness.

Financial and Cash Flow Risk

Accounts receivable and contract assets increased 142.61% and 62.42%, respectively, year over year. The increase in receivables has tied up a large amount of operating funds. At the same time, there is uncertainty regarding cash collection for some projects. If cash collection becomes difficult, it could cause the company’s cash flow to tighten and even affect its ability to operate on a going-concern basis.

Related-Party Transaction Risk

The related-party transaction amounts between the company and its controlling shareholder, COSCO SHIPPING Group, and its subsidiaries account for 54.62% of the company’s annual total sales. The scale of related-party transactions is relatively large. Although the company strictly fulfills related-party transaction decision-making procedures, there remains a potential risk that related-party transaction pricing is not fair and may harm the interests of minority shareholders.

Compensation of Senior Executives (Board/Management)

In 2025, the chairman, Wang Xinbo, had total pre-tax compensation received from the company of RMB 1.6029 million; the general manager, Lin Yiwen, had total pre-tax compensation of RMB 1.4225 million; the vice general manager, Zhang Yu (left office), had total pre-tax compensation of RMB 0.3076 million; and the financial director, Yu Jianzhong, had total pre-tax compensation of RMB 1.3978 million. The core executives’ compensation shows a certain degree of linkage with the company’s performance, and at the same time reflects incentives and constraints on the executive team.

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Responsible editor: Xiao Lang Express